HB 0801, Engrossed 1 2003
1	A bill to be entitled
2	An act relating to the City of West Palm Beach, Palm Beach
3	County; amending the West Palm Beach Firefighters Pension
4	Fund to provide for optional methods of crediting
5	investment earnings to chapter 175, Florida Statutes,
6	share accounts and DROP accounts; providing an effective
7	date.
8
9	Be It Enacted by the Legislature of the State of Florida:
10
11	Section 1. Subparagraph 3. of paragraph (j) of subsection
12	(5) of section 17 of chapter 24981, Laws of Florida, 1947, as
13	amended by chapter 2002-360, Laws of Florida, is amended to
14	read:
15	Section 17. West Palm Beach Firefighters Pension Fund.--
16	(5) Service pension.--
17	(j) Chapter 175, Florida Statutes, share accounts.--
18	3. Annual allocation of accounts.--
19	a. Moneys shall be credited to each individual member
20	account in an amount directly proportionate to the number of pay
21	periods for which the member was paid compared to the total
22	number of pay periods for which all members were paid, counting
23	the pay periods in the calendar year preceding the date for
24	which chapter 175, Florida Statutes, tax revenues were received.
25	b. At the end of each fiscal year (September 30), each
26	individual account shall be adjusted to reflect the earnings or
27	losses resulting from investment, as well as reflecting costs,
28	fees, and expenses of administration.
29	c. Effective October 1, 2002, vested participants have the
30	option to select one of three methods to credit investment
31	earnings to their account. The method may be changed each year
32	effective October 1; however, the method must be elected prior
33	to October 1. The methods are:
34	(I)The investment earnings or losses credited to the
35	individual member accounts shall be in the same percentage as
36	are earned or lost by the total investment earnings or losses of
37	the Fund as a whole, unless the Board dedicates a separate
38	investment portfolio for chapter 175, Florida Statutes, share
39	accounts, in which case the investment earnings or losses shall
40	be measured by the investment earnings or losses of the separate
41	investment portfolio;
42	(II) A fixed annual rate of 8.25 percent; or
43	(III) A percentage of the share account assets to be
44	credited with earnings or losses in accordance with sub-sub-
45	subparagraph (I) and a corresponding percentage of the share
46	account assets credited in accordance with sub-sub-subparagraph
47	(II). The combined total percentage invested under this sub-sub-
48	subparagraph must equal 100 percent.
49	d. Costs, fees, and expenses of administration shall be
50	debited from the individual member accounts on a proportionate
51	basis, taking the cost, fees, and expenses of administration of
52	the Fund as a whole, multiplied by a fraction, the numerator of
53	which is the total assets in all individual member accounts and
54	the denominator of which is the total assets of the Fund as a
55	whole. The proportionate share of the costs, fees, and expenses
56	shall be debited from each individual member account on a pro
57	rata basis in the same manner as chapter 175, Florida Statutes,
58	tax revenues are credited to each individual member account
59	(i.e., based on pay periods).
60	e. If the entire balance of the individual member account
61	is withdrawn before September 30 of any year, there shall be no
62	adjustment made to that individual member account to reflect
63	either investment earnings or losses or costs, fees, and
64	expenses of administration.
65	Section 2. Subparagraph 2. of paragraph (k) of subsection
66	(5) of section 17 of chapter 24981, Laws of Florida, 1947, as
67	amended by chapter 2002-360, Laws of Florida, is amended to
68	read:
69	Section 17. West Palm Beach Firefighters Pension Fund.--
70	(5) Service pension.--
71	(k) Deferred Retirement Option Plan (DROP).--
72	2. Amounts payable upon election to participate in the
73	DROP.--
74	a. Monthly retirement benefits that would have been
75	payable had the member terminated employment with the Department
76	and elected to receive monthly pension payments shall be paid
77	into the DROP and credited to the retirant. Payments into the
78	DROP shall be made monthly over the period the retirant
79	participates in the DROP, up to a maximum of 60 months.
80	b. Effective October 1, 2002, participants have the option
81	to select one of three methods to credit investment earnings to
82	their account. Investment earnings shall be credited on a
83	quarterly basis. The method may be changed each year effective
84	October 1; however, the method must be elected prior to October
85	1. The methods are:
86	(I) EarningsPayments to the DROP earn interestusing the
87	rate of investment return earned on Pension Fund assets as
88	reported by the Fund’s investment monitor. DROP assets are
89	commingled with the Pension Fund assets for investment purposes;
90	(II) A fixed rate of 8.25 percent; or
91	(III) A percentage of the DROP account assets to be
92	credited with earnings or losses in accordance with sub-sub-
93	subparagraph (I) and a corresponding percentage of the DROP
94	account assets credited in accordance with sub-sub-subparagraph
95	(II). The combined total percentage invested under this sub-sub-
96	subparagraph must equal 100 percent.
97
98	However, if a member does not terminate employment at the end of
99	participation in the DROP, interest credit shall cease on the
100	current balance and on all future DROP deposits.
101	c. No payments shall be made from the DROP until the
102	member terminates employment with the Department.
103	d. Upon termination of employment, participants in the
104	DROP shall receive the balance of the DROP account in accordance
105	with the following rules:
106	(I) Members may elect to begin to receive payment upon
107	termination of employment or defer payment of the DROP until the
108	latest day under sub-sub-subparagraph (III).
109	(II) Payments shall be made in either:
110	(A) Lump sum.--The entire account balance shall be paid to
111	the retirant upon approval of the Board of Trustees.
112	(B) Installments.--The account balance shall be paid out
113	to the retirant in three equal payments paid over 3 years, the
114	first payment to be made upon approval of the Board of Trustees.
115	(C) Annuity.--The account balance shall be paid out in
116	monthly installments over the lifetime of the member or until
117	the entire balance is exhausted. Monthly amount paid will be
118	determined by the Fund’s actuary in accordance with selections
119	made by the member in a form provided by the Board of Trustees.
120	(III) Any form of payment selected by a member must comply
121	with the minimum distribution requirements of the IRC 401(A)(9),
122	and are subject to the requirements of subsection (19).
123	(IV) The beneficiary of the DROP participant who dies
124	before payments from DROP begin shall have the same right as the
125	participant in accordance with subsection (7).
126	e. Costs, fees, and expenses of administration shall be
127	debited from the individual member accounts on a proportionate
128	basis, taking the cost, fees, and expenses of administration of
129	the Fund as a whole, multiplied by a fraction, the numerator of
130	which is the total assets in all individual member accounts and
131	the denominator of which is the total assets of the Fund as a
132	whole.
133	Section 3. This act shall take effect upon becoming a law.